The biggest draw to joining a firm network or association is the other member firms and the expertise and geographical reach that they can provide.
When considering membership, firms should "take a look at what their strategic plan is going forward, and if the results [they want] are in need of greater resources," advised Steven Sacks, executive director of CPA association Moore Stephens North America.
The greatest of these resources is an exchange of best practices, according to a recent survey global association BKR International took of its members, who ranked that benefit at the top of the list.
"The highest-value item we provide is networking with other members," agreed Terry Snyder, president and chief executive of accounting and consulting association PKF North America. "It's the highest intangible and most difficult to sell ... but the biggest thing to get out [of an association or network] is engagement with each other. We look at ourselves to create that value."
This value is best contained within practice groups, which associations like BKR and PKF offer for more specialized engagements to help "support [members] in niches and develop new niches," explained Snyder. These specialties encompass everything from technology and human resources to tax and manufacturing.
At PKF, groups connect over an online listserv, where answers to questions are "at their fingertips," while Moore Stephens hosts group dialogues on online discussion boards.
When not looking within the association or network, firms are looking outward and internationally, according to Howard Rosen, chairman of BKR International's Americas Region, who cited BKR members as ranking that global reach as the second-most important benefit in the above-mentioned survey.
"The world keeps getting smaller," Rosen elaborated. "For small or medium-sized firms, they might have an overseas operation, or one 15 states away. You have someone you know or met at a conference or in a practice group that you feel comfortable with asking for assistance with that client."
This international span is what James Castellano, chairman of accounting and business advisory firm network Baker Tilly International and St. Louis-based accounting firm RubinBrown, lists as most important to Baker Tilly's member firms.
As networks are typically composed of a more exclusive group of larger firms and operate more like a Big Four firm, greater access to and the ability to bring on new international clients is at a premium.
A network "provides the resources to retain existing clients and win new clients," Castellano continued. "When you expand internationally without a network, there's a significant risk of losing clients or an aspect of that relationship. A network provides a significant competitive advantage."
Baker Tilly has also leveraged this benefit into its secondment program, an international exchange that sends professionals from one region to work inside another member firm for three to six months.
Another significant benefit of the network, according to Castellano, is "the access to a recognizable global brand" in the Baker Tilly name. He shares this affiliation with prospective RubinBrown clients and explained that more and more member firms are trading under the Baker Tilly name.
ADAPTING TO A CHANGING MARKET
While an association is made up of independently owned accounting firms that cannot operate under the association's name, member firms can benefit from the brand identity of affiliation, as well as utilizing the collective marketing expertise to further their individual brands.
"For a while, people [in accounting firms] didn't have to have an extended marketing effort," shared Snyder. "They would have a T-shirt on that would say 'CPA' and people would come up and ask if [they] can do their work. They are good strategists, and good with operations, and they can show that value - accountants can really shine in that arena. It is a quality the industry had before and now we're coming back to it."
The economy has signaled this need to shift into more sophisticated marketing efforts, but also leads to hesitation from firms weighing the value for the cost of joining an association. "Associations and networks are some of the best-kept secrets," Snyder continued. "In a lot of ways, prior to two years ago, accounting firms grew and didn't need anything. As we step back to [the model of] more traditional accounting firms, they are needing development."
According to Rosen, firms will get the most value out of joining an association by having an active management team. Specific practice groups and roundtables cater to this level, and as these managers and partners ascend the ladder of their respective firms, it proves mutually beneficial for associations like BKR, which are assured long-lasting ties with those firms.
Sometimes managing partners are the "key entry point" to bring new firms into the membership, Snyder revealed. And once part of an association, many managing partners who "don't have friends among other managing partners develop relationships. They call each other up with difficult questions - how to handle that - like a partnership agreement question. I see that every day."
Sacks counts many reasons for today's firms to front the cost of association membership, including increased competition, the move toward specialization, new technology ushering in the paperless office, international standards and the challenges of succession planning in the next 10-to-15 years as Baby Boomers retire.
"There is a confluence of change agents out there that are going to impact the firms," Sacks explained. "They have to decide whether they want to face the challenges themselves or be part of something bigger that enables them to give and get in a collaborative fashion."
DEVELOPING THE SKILLS
The particular skill sets required to meet these challenges are what BKR survey respondents listed as the third-largest benefit of an association.
Now and in the future, the most urgent of these skills are technological. "There's going to be a period of innovation - we don't know when it's going to come," Sacks predicted. "Things are more driven through automation than anything else, and it's going to change the face of the accounting profession and the hiring and skill sets needed."
In addition to seeking knowledge through practice groups, association and network members share ideas by teleconferencing or attending conferences.
Baker Tilly International, for instance, hosts regional conferences and one global conference annually. Some of these events correspond to programs for the next generation of leaders, like the 18-month leadership curriculum that BKR established last year, or the leadership development program created for Baker Tilly by the University of Chicago Booth School of Business.
SHOPPING FOR THE RIGHT FIT
Some of the work of deciding between joining an association or a network is already done for a firm - larger networks will recruit desirable candidates on their own.
Firms that are set on a specific network shouldn't necessarily wait for an opening, advised Castellano, but "join another network, while keeping an eye open to move into a network they view as more valuable."
Networks and associations do overlap in some areas. "Associations can provide great practice management resources and people development resources," Castellano continued. "Some things from a network you can find in an association, but not all."
PKF offers a free membership "test drive" of the association's services, but in most cases prospective members can gain the best insight into an association through its current members. "They should talk to a working member about how the association has helped them," Rosen explained. "I'm going to get on the phone and call two to three members of firms similarly sized to me."
Firms should use this method of scanning the ranks for firms of comparable size when choosing between different associations, along with deciding what they hope to gain from the affiliation. "One person's value of an association may not be so important to another firm that values an association based on other criteria," Sacks offered. "One firm may not have any international business or be in a hub where they can attract international business, but may want to improve the way they operate their audits and tax filings and find greater efficiencies."
Regardless of the skill set, geographical advantage or brand identity sought, firms can bask in an association or network's synergy.
Said Sacks, "You are part of a membership club where the whole is greater than the sum of its parts."
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